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The Cleveland Model

If there’s a “Chicago model” (or “Daley model”) of urban development, it’s this: use public TIF subsidies to attract corporate headquarters and big-box retailers that sometimes pay poverty-level wages and send employees to public health programs, and to subsidize high-end real estate development that gentrifies and displaces; and privatize public services from schools to parking to airports, in a mad scramble for revenue.

Meanwhile, in the search for ever-elusive “bipartisanship,” federal jobs and economic stimulus policies are sapped by tax cuts while shortchanging direct stimulus like unemployment assistance and aid to states, and a “green” energy and jobs policy spends billions of dollars to subsidize nuclear power and “clean coal.”

Cleveland offers a better way.  As detailed in the Nation this week (and Yes magazine last year), Evergreen Cooperatives of Cleveland are creating large-scale employee-owned green businesses aimed at serving “anchor institutions,” particularly hospitals and universities, which purchase billions of dollars of goods and services every year.

Backed by the Cleveland Foundation and Shorebank Enterprise Cleveland among others, Evergreen Cooperative has launched  the Evergreen Cooperative Laundry to provide green services to hospitals and Ohio Cooperative Solar, which is weatherizing residences and installing solar panels on nonprofit and municipal buildings.  Also in the works is Green City Growers, a massive year-round hydroponic greenhouse which will be the largest urban food-production operation in the nation, and Neighborhood Voice, a community-based newspaper.

Based in low-income communities, all the businesses will pay living wages and provide health coverage.  And unlike multinational chains, where profits are whisked back to Wall Street, they will build assets for low-income families:  employee-owners are projected to build a $65,000 equity stake within eight years.  On top of that, 10 percent of profits from each enterprise will go back to the Evergreen Cooperative Development Fund to develop more jobs.

Here’s the video.  It’s pretty inspiring.

The project is modeled on the Mondragon Cooperatives, begun by a priest and five workers in Spain in 1953 and now comprising 200 enterprises in 40 countries with 100,000 employee-owners and annual sales of 16 billion Euros.  As Carl Davidson explains, Mondragon workers build buses and appliances and high-tech machine tools and operate a chain of supermarkets—and they run their own banks, health clinics, schools, and Mondragon University, all worker-owned co-ops.

Last year the United Steelworkers announced a partnership with Mondragon to develop manufacturing cooperatives here.  According to Davidson, the partnership is now looking for viable small enterprises where owners are interested in cashing out.

“Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollowing out communities by shedding jobs and shuttering plants,” said USW President Leo Gerard.  “We need a new business model that invests in workers and invests in communities.”

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Category: development, green jobs, jobs, labor

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5 Responses

  1. Robert Hennecke says:

    Very encouraging.

  2. Robert Hennecke says:

    I have an idea of how this concept can gain traction very cheaply and start to make an impact. If tiny hardware stores could be bought out across the US & canada on the cheap from retiring store owners who can’t hope to compete with home depot etc…. strung together they could constitute a continental distribution network and allow for any products manufactured by the co-ops/guilds. Operating on the idea that it was the post office that allowed for Sears and Roebuck to sell continent wide these tiny underfinanced hardware stores located most likely in small towns and thus being ultra cheap to aquire taken together would create a sustainable volume for things to be made in N. America and allow for a parallel arrangement to compete with Walmart etc…

  3. This is a post I made regarding Tony Blair’s theories as to what brought about the UK riots posted on the Guardian UK site.

    I only agree on them being alienated. I have in the past commented that there needs to be an alternate economic model running in parrallel within the capitalist system I call Modernized Craft Guilds. Temporary non profit status (3 years) and foreclosed properties lent to worker owned production co-ops. The corporate model is a winner take all idea and every society has at least 20 % of their population that don’t function well within it and these make up the G-20 protesters etc… They have no stake and feel cheated by a system that clearly rewards those the system ‘prefers’ and understandably they lash out, it’s only ‘human’ really. Globalizaaion has put further strains on an ever weakening social contract to the point of non existence so outbursts of violence and destruction is inevitable as far as I can see. These types of people and youth in general like to be called upon and have some kind of physical work they can particpate in that provides an escalator of progress. Off-shoring has rendered that to being forklift operators and truck drivers etc…as infinitum. To me it’s a recipe for disaster and I do agree with Mr. Blair as well actually regarding his point of ALL industrialized (post-industrial in reality) having the problem of dis-affected youth but would amplify it to say disaffected populations beyond only youth. I say that they CAN be integrated into the mainstream but it will take a new economic model working in parallel. THE TEMPORARY NON PROFIT PRODUCTION GUILD. Maybe in 20 years it will become obvious but for now we will keep smacking into walls.

  4. This morning I realized that a profitable endeavour for Mondragon type worker-owned co-ops is generic pharmaceutical production. Why ? Because in reality it is a packaging process that is overly hyped as super complexe. My cousin in Florida does pill encapsulating for the big pharma firms and he makes a big deal of how complexe it is but in reality it’s batch making, quality control and tablet encapsulating. I’d say that in technical terms it’s EASIER than building machinery and kitchen appliances. The skills required for the production workers are not that high and 6 months training would be more than enough. These aren’t new drugs so rigorous FDA screening approval wouldn’t be reqwuired, just oversight and quality control testing to conform. The societal benefit would be greater competition for the cosy pharmaceutical club and thus lowering pharma costs to society and thus lowering the overall costs to medicare which could result in it’s being extended to cover more people. GET IT, win, win and win.

  5. Long term these entities can engage in research with the intent of producing drugs that the sinister Pharmaceutical industry is loathe to undertake due to their twisted logic of grabbing handouts but making minimal effort to do research that entails some risk but of course patenting every minimal aspect of their drugs to prevent wider distribution of their drugs notwithstanding their plowing of resources into frivulous ‘drugs’ such as Viagra etc….


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